AgustaWestland has been awarded a helicopter support contract worth £580 million.

AgustaWestland has been awarded a helicopter support contract worth £580 million Credit: Andrew Matthews/PA

The deal will provide maintenance support to the Royal Navy's Merlin Mk2 and Mk3 helicopters over the next five years. It is hoped the new contract will deliver more than £140 million savings over that time.

More than 1,000 jobs will also be sustained across the UK, with many located at AgustaWestland's facility in Yeovil and at the Royal Navy Air Station in Culdrose, Cornwall.

The Merlin is an important part of our overall Helicopter Force, providing a variety of specialist and general roles in all weathers over land and sea.

We are bringing in the contract one year earlier than planned to meet the requirements of the Front Line Commands and to deliver financial benefits, which is a great achievement and shows how the MOD can adapt flexibly to support the needs of our Armed Forces.

– Air Vice-Marshal Julian Young, Director Helicopters at the MOD’s Defence Equipment and Support Organisation

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Somerset helicopter firm Agusta Westland says a new multi-million pound contract will help to protect the jobs of 3,000 workers. The Yeovil-based firm has signed a deal with the Ministry of Defence worth £90 million. It involves testing and installing a new missile system for 28 Wildcat helicopters.

Union leaders are seeking clarification of AgustaWestland's plans after suggestions that the company might have to shed jobs following the Indian government’s cancellation of a 12-helicopter deal at the Yeovil plant.

Unite wants to know about future plans at the Somerset plant, after the contract, worth about £455 million, was cancelled amid allegations that Indian officials were bribed to secure the deal.

“We want to hold talks with the management to seek clarification on the implications of this cancellation for employees.

“This is a dedicated and skilled workforce, and we need to get assurances about job security going into 2014. The company’s products are highly regarded internationally.

“We understand that the company has other contracts in place with the Norwegian government which is to be welcomed.”

– Unite national officer for aerospace Ian Waddell

AgustaWestland is the helicopter arm of Italian defence giant, Finmeccanica. Three of the helicopters have already been delivered to India and the remaining nine were due to be dispatched by the middle of this year.

Yeovil MP David Laws today commented on the news that the Indian Government has pulled out of a deal with AgustaWestland.

'In my view it would have been preferable to give time to establish the veracity of the allegations which have been made before taking any action.'

'AgustaWestland has over many years demonstrated its resilience, based on the outstanding quality of the helicopters which it makes. I expect the company to go on selling its products all over the world and to show that this setback can be overcome.'

Business Secretary Vince Cable with an AW101 helicopter at Agusta Westland in Yeovil last month Credit: ITV News West Country

India has cancelled a £464 million deal for helicopters being built at Agusta Westland in Yeovil. It follows allegations of corruption earlier this year, which the company denies. Three of the 12 AW101 helicopters ordered have already been delivered.